Social Security retirement trust fund may be depleted in 2032, new trustees report finds

A Social Security trust fund used to pay retirement benefits may run out in late 2032, three months earlier than what had been projected last June, according to the new Social Security Administration annual trustees report released on Tuesday.

Social Security uses incoming revenue from payroll taxes to pay benefits. When benefit payments exceed payroll tax income, the program relies on the trust funds to help make up the shortfall.

The report said that if the fund is depleted as projected, Social Security will only be able to pay 78% of retirement benefits.

The new projected depletion date follows the enactment of President Donald Trump's "big beautiful" tax law, which Social Security's chief actuary said in an August letter would have "material effects" on the financial status of the trust funds because it impacts income taxation of Social Security benefits. At that point, they estimated late 2032 for the retirement fund depletion date, pushed up from the 2025 trustees report estimate of the first quarter of 2033.

The OASI trust fund — formally known as Old Age and Survivors Insurance, or OASI — if combined with the disability insurance trust fund, may be able to pay full benefits until the third quarter of 2034, when 83% of benefits will be payable, according to the new report. That estimate is unchanged from the prior trustees report.

While current law prohibits combining the trust funds, Congress may authorize shifting money to cover benefit payments in the event of shortfalls. However, combining the trust funds would require taking money from beneficiaries with disabilities and putting it toward OASI beneficiaries, who include retirees, survivors and dependents, according to Shai Akabas, vice president of economic policy at the Bipartisan Policy Center, a Washington, D.C., think tank promoting bipartisanship.

"That solution is merely a band-aid," Akabas said of combining the trust funds. "It'll delay the point at which Congress would have to tackle the broader problem."

The disability trust fund is projected to have a positive balance for the next 75 years, according to the new trustees' report.

Social Security is not going bankrupt, experts say, though benefits may be reduced when the program reaches the trust fund depletion date. While monthly payments would not stop entirely, the benefit cuts may be substantial.

Average monthly benefit cuts may be $500, while in 29 states the losses would be higher, according to recent research from the Committee for a Responsible Federal Budget, a nonpartisan, nonprofit organization focused on educating the public on fiscal policy issues.

The average monthly retirement benefit for 2026 was projected to be $2,071 following the announcement of the 2.8% cost-of-living adjustment for the year, the Social Security Administration said in October.

This is not the first time Social Security has been on the brink of a trust fund shortfall that would require benefit cuts. In 1983, Congress avoided the looming across-the-board benefit reductions by enacting changes to the program to extend its solvency. Those changes included taxing benefits and gradually raising the retirement age.

"What's concerning is that we've known about this problem for several decades, and Congress has not done anything to address it," Akabas said.

Social Security currently provides monthly benefits to around 71 million Americans, according to the Social Security Administration. The program provides the majority of income for 43% of seniors, according to the AARP, a nonpartisan organization representing individuals ages 50 and over.

"This should be a wake-up call: Congress needs to act," AARP CEO Dr. Myechia Minter-Jordan said in a statement. "Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire. No family should see any cuts to what they've earned in Social Security."